There are thousands of victims, who claim to have been cheated as much as VND15 trillion, or roughly US$650 million, by a virtual currency ring, but there is little sympathy. However, worries over social instability are awash, given the rampant development of cryptocurrency trading rings that are operating in broad daylight without being punished.

As widely covered in local media, the cheat is so extensive, sending devastating ripple waves to all corners of the society, given the huge number of victims, initially put at 32,000. The incident has made big headlines in recent days after scores of people took to Nguyen Hue Boulevard in downtown HCMC on Sunday, holding large signs accusing a ring of cheating them. The accused culprits are still at large.

The story all surrounds a company named Modern Tech whose founders established a pyramid scheme for cryptocurrency investment. As stated in Nguoi Lao Dong, the company, headquartered on the ninth floor of a building at 68 Nguyen Hue Boulevard, registered business scopes of design, software programming and software development among others. It declared to begin business last October, but in fact, the head office at the given address is a virtual one, without engaging in any real business but cryptocurrency investment, says the paper. Modern Tech has organized numerous road shows, enticing people to engage in lending via two cryptocurrencies called iFan and Pincoin.

Promises were extravagant. Investors were guaranteed to enjoy a monthly interest rate of 48%, or nearly 600% a year, while those people convincing others to join the scheme are entitled to an additional 8% on the investment, according to Tuoi Tre.

Such high returns for any people of a sound mind are fishy, so the question is whether the investors could smell it. The answer, according to local media, is by all means affirmative.

In a commentary titled “Virtual money investment: Greed, no cheat!” Lao Dong asserts that it is greed that led such investors to the ring. “All investors understand that there is no business that can generate a return of 48% a month. Saying that they are greedy is correct, but claiming they are cheated or they are stupid is wrong,” comments the paper.

The paper goes on to say that such investors are not only greedy, but evil as well when joining a pyramid scheme on cryptocurrencies. “Cryptocurrency and virtual money investment combined with a pyramid scheme is an evil business ring for all participants whose ultimate goal is to cheat other peers so as to earn as much profit and as quickly as possible,” says the paper, adding “the blood money coming from hyper profit rates is wreaking havoc on the society as children deceive their parents and friends cheat one another.”

In Nguoi Lao Dong, a reader observes that such investors are now paying a dear price for their greed. “These investors know clearly that there is not a single business channel with a rate of return as high as 50%. The reason they give themselves into the ring is that they expect to withdraw quickly with all the high profits when the right time comes,” the reader is quoted as saying in the paper.

Dao Trung Hieu, an expert on criminology, says on news website Dan Viet that many people were aware of the huge risks or the imminent cheat, but they still poured their money into the scheme out of greed, or even encouraged relatives and friends to participate.

Many so-called victims in an encounter with Tuoi Tre also admit that they are blinded by the extremely-high rate of return. An investor states in a letter of accusation that she was promised of an interest rate of 48%, but a short time after winning enough investors, the ring leaders cancelled the payment of interest sums in cash, and gave such lenders virtual money. There are many people having lost billions of dong in the illegal ring.

Even if those investors may be deemed voluntary victims, a cheat is still a cheat.

Modern Tech set the exchange rate at US$5 to an iFan coin for the sums paid in by investors, while in reality, the cryptocurrency was traded at a mere one U.S. cent, meaning the nominal value was 500 times higher than the real value, according to Tuoi Tre.

Meanwhile, news site Vnexpress citing investors reports that the two cryptocurrencies, iFan and Pincoin, were claimed to be international digital money with their initial coin offerings launched in Singapore and India respectively. However, the tracking of their official website at iFan.io shows that as of December, up to 91% of visits were from inside Vietnam.

Many media outlets also point out that there are numerous other rings trading in cryptocurrencies and virtual money, and local investors are still injecting money into such high-risk channels.

At financial forums in HCMC, many people are still seeking consultancy and trading in such virtual currencies, according to Tien Phong. At a venue on Dao Duy Anh Street in Phu Nhuan District as the trading floor for virtual money DAG, the paper says many people were seen gathering to discuss investment, with each being asked to spend between 100 and 25,000 euros on DAG. Those who can convince others to invest between 12,500 and 25,000 euros will be given a commission of 8%.

News site Vietnamnet gives a long list of virtual currencies being widely traded in the country on floors such as Uncoincash, Regalcoin, Oac, Hextracoin, Falcon, and Davorcoin.

It is noted that the State Bank of Vietnam has repeatedly warned against all cryptocurrencies and virtual money, and a document by the central bank taking effect early this year regulates the trading of cryptocurrencies and virtual money is illegal.

As digital and virtual currency trading rings may claim more victims in the future and damage the country’s economy, State agencies have stepped in to ward off such illegal activities. In HCMC, the municipal government has ordered police to launch an investigation into the scam.

Most recently, the Prime Minister on Wednesday issued a directive urging all relevant ministries, agencies and localities to take quick action to punish violators.

Although thousands of people have fallen victim to the Modern Tech ring, to some extent they may also be charged of collusion by asking others to join the ring. Police will conduct the investigation to pinpoint violators, and according to Tuoi Tre, those investors who lost money to the ring may also be implicated criminally if competent authorities can establish that such greedy investors-turned-victims have lent a helping hand to the main culprits to appropriate money from others.